I started a multi member LLC last year. I also used one of my rooms in my house as home office. We did not make any profit last year. Which TT products I need to use?

[de-navar]

I am employed by a company in Teaxs, and I also established a multi member LLC (started it last year and it has two members) in Texas last year. We spend some money on the LLC for advertising, laptop, website, legal fees, etc.... I also used one of my rooms in my house as home office. Which TT package I should use to file both my Bussiness tax return and Personal one?

I understand that I should use TT Business to send 1065 to IRS by March 15th and also generate K-1 for each partner. 

Do I need to buy Premier or Home & Business package for my personal return (considering that I will get a K-1 from previous step and I also used my home office for this multi-member LLC)?

[IreneS · Accepted solution]

First , does your partnership agreement require you to pay office expenses out of your own pocket? 

• If yes, you will need to calculate the expenses and enter them into TurboTax.
  
• If no, you won't be able to take a deduction for office expenses.

You can use one of the worksheets in Publication 587 - Business Use of Your Home:

www.irs.gov/pub/irs-pdf/p587.pdf

• Worksheet to Figure the Deduction for Business Use of Your Home, [p.23]
• Worksheet to Figure the Deduction for Business Use of Your Home (Simplified Method) [p. 26]

After you have calculated the expenses for your home office you can go through the Schedule K-1 entry. 

To enter the K-1 and the related home office expenses, please follow these steps:

1. Click on Federal Taxes > Wages & Income
2. In the Business Items section click on the box next to Schedules K-1, Q.  [Screenshot #1, below.]
3. Click Yes on the next screen, Schedules K-1 or Q?
4. On the Tell Us About Your Schedules K-1 screen.  Click on the Start/Update box next to Partnerships/LLCs (Form 1065).   [Screenshot #2]
5. If you have already entered K-1 information, you will see a Summary screen.  Click Add Another K-1 to enter your information  (or click on Edit to continue with the existing form entry).  [Screenshot #3]
6. If you haven't started entering K-1 information, continue through the screens, entering the requested information.
7. When you come to the screen, Describe the Partnership, select the box  I am required to pay supplemental business expenses . . .   [Screenshot #4]
8. On the Unreimbursed Partnership Expenses screen, click the blue Yes box.
9. When you get to the Miscellaneous Supplemental Expenses screen, enter the allowable expenses for the business use of your home from the worksheet you used.   [Screenshot #5]

[de-navar]

Thanks Irene. One last question. I also have some car mileage and other expenses due to this business. Can I also claim them using the Premier?
Isn’t it easier if I get Home & Bussiness? For example instead of manually calculating my home expenses with IRS 587 and place them in Premier, doesn’t Home & Bussiness do that automatically?

[de-navar]

Thank Irene. One last question.
I am employed by an employer (Company A) and I also established my own multi-member LLC last year in Texas.

As I mentioned before, for my personal taxes, I would like to add my home office usage for multi-member LLC. My multi-member LLC is mainly run by me, and my partnership agreement requires to use of my home office (we do not have any other physical place to work). I am trying to use the "Worksheet to Figure the Deduction for Business Use of Your Home" (Simplified Method) [p. 26] of Publication 587. We did not have any income from our multi-member LLC last year but I have income from my original employer (Company A). I am not sure what should I use in Line 1 of Simplified Method (Enter the amount of the gross income limitation). As I said, I have income from company A (for example 80K) and zero from multi-member LLC which I used my home office for it. My office space is around 200 sqf. I am employed by an employer (Company A) and I also established my own multi-member LLC last year in Texas. I need to file my personal taxes along with my business taxes.

[IreneS]

Since the home office is for your LLC, and you didn't have any income, enter 0 on the worksheet.  
Because the expenses are Unreimbursed Partnership Expenses (UPE) they are entered in the K-1 section of the program under UPE.  

TurboTax does have worksheets to calculate expenses for a home office and vehicle expenses, but these are located in the section  for a sole proprietorship.  You can use the worksheets to calculate the expenses, but remember to go back and delete them before filing your 1040.  Both the Premier and Self-Employed versions of TurboTax Online AND the CD/Download versions contain  the worksheets.

Since the LLC did not have any income, your UPE will create a loss on your K-1, which you can take (up to your basis in the LLC).

[IreneS]

You are correct -- for a business return (Partnership, S-Corporation, Corporation, Estate/Trust) you will need TurboTax Business. You can visit the following link to purchase TurboTax Business for 2017: TurboTax Business

For your personal (1040) return you can use:

• TurboTax Online Premier --OR--
  
• Any of the Desktop CD/Download programs:   https://turbotax.intuit.com/personal-taxes/cd-download/  [The necessary forms appear in all versions, you get more help in the program with the higher versions.]
  

[de-navar]

Thank you Irene. Which CD/Download program should I get to be able to handle my K-1 form and also Home office usage for Multi-member LLC? Premier or Home & Business?

[IreneS]

Both Premier and Home & Business will handle the entries for the K-1 and home office.  I recommend Premier -- you really don't need the H&B version, since you won't be using it for your business.   You'll enter the information  from your K-1 and then enter your Home Office expenses as Unreimbursed Partner Expenses as part of the K-1 interview.  Premier will handle the situation nicely.

[IreneS]

I have added a second answer above explaining about the home office for a Partner and providing the steps to enter the K-1 and home office in TurboTax Premier.